DRAM Prices Continue to Fall Despite of Back-to-School Season.

Despite of back-to-school season as well as the fact that the supply of dynamic random access memory (DRAM) dropped from last year due to bankruptcy of Elpida Memory, the prices of 2GB and 4GB mainstream DDR3 modules in August got lower both compared to previous months as well as year-over-year, according to DRAMeXchange market tracking firm.

According to the research division of TrendForce, contract prices on DRAM in the second half of August are continuing to show a downtrend, with DDR3 4GB module price falling to the $18 mark, a 4% decrease. The spot price has dropped to as low as $17.5, which represent more than a 5% decrease. The 2GB DDR3 memory module contract price dipped by only 2.4%, and fell to approximately $10.25. In total, the overall price drop amounts to 10%, the highest this year for a single month.

At press time, one untested 2Gb DDR3 chip price cost $0.7 on average in Taiwan's spot market, 2Gb DDR3 1333MHz/1600MHz chip's price was approximately $0.851, whereas 4Gb DDR3 1600MHz memory IC was priced at $2.571 on average on the spot market.

Because of the weakening global economy, the overall PC shipment dropped by 2.5% compared to the same period of last year, the market research firm claims. As a result, DRAM inventory levels to reach to 8 to 12 weeks.

According DRAMeXchange’s assistant vice president, Ken Kuo, because of the faster than expected price drops, first-tier DRAM manufacturers are making a transition to mobile DRAM and server DRAM in order to minimize the downward price adjustment’s overall impact. Second-tier manufacturers, on the other hand, face a crisis in which prices have dipped below m manufacturing cost. In order to avoid negative cash flow, these manufacturers need to decide on whether to cut down on production, to make a transition to different DRAM models, or to quit the DRAM market all together.